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Alabama auto sector primed for growth with $1 billion in new investment

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Alabama’s auto industry continues to thrive, racking up new jobs and investments in communities across the state.

Last year, there were at least 68 auto projects, for an estimated total of 3,848 jobs and $907.1 million in new capital investment, according to an analysis of the 2016 New & Expanding Industry Report. New projects announced this year push that total past $1 billion and add hundreds of more jobs.

The projects included new companies and expanding operations, which manufacture everything from intricate vehicle parts and major component systems to entire automobiles.

“Our deep roots in the auto industry keep growing deeper,” said Greg Canfield, secretary of the Alabama Department of Commerce. “Last year alone, there were new or expanding auto companies in 26 Alabama counties, showing the vast reach of auto production in Alabama.”

Hyundai invested $52 million in its Alabama assembly plant to launch production of the Santa Fe Sport SUV.

Commerce Sec. Canfield presents MollerTech leaders with an Alabama seal at a groundbreaking ceremony. The company is one of several auto suppliers that announced projects in Alabama during 2016.

Jason Hoff, head of Mercedes' Alabama operation, speaks at a topping out event tied to the automaker's expansion. (Image: Mercedes)

“Our suppliers have found – just as we have – that Alabama is a great place to do business.”

The foundation of the state industry is made up of three auto assembly plants operated by Mercedes-Benz, Honda and Hyundai, as well as a major engine plant for Toyota.

Elsewhere, Spain’s Truck & Wheel Group is building its first U.S. parts plant in Tuscaloosa County, where it’s investing $30 million in an operation that will employ 70 people. In Lee County, The Berghoff Group announced a $30 million, 100-job precision machining facility.

PROMISING OUTLOOK

As Alabama’s auto industry marks a key milestone – two decades of vehicle production – the sector’s growth prospects continue to look strong in 2017.

Mercedes, for example, recently held a supplier forum at its plant to discuss its next-generation SUVs. Officials for the automaker underlined the current and future importance of SUV production in Alabama during personal discussions with partners, including Lear, SMP and Kamtek.

They also emphasized the successful partnership that has grown over the years since the first Mercedes M-Class rolled down the automaker’s Alabama assembly line on Feb. 14, 1997.

“The increasing requirements due to a continual rise in production numbers for the SUV segment was a massive challenge for all suppliers, which was mastered very well,” said Dr. Klaus Zehender, member of the divisional board of Mercedes-Benz Cars, Procurement and Supplier Quality.

“These are exciting times for our Alabama facility as we prepare to take on this new challenge to build the next generation of SUVs,” he said. “Mercedes-Benz became the first auto manufacturing plant to build vehicles in Alabama more than 20 years ago and, since that time, other automakers and suppliers have joined us.

“Our suppliers have found – just as we have – that Alabama is a great place to do business,” Hoff added.

2017 MOMENTUM

Meanwhile, 2017 has brought new auto sector projects to Alabama, setting the stage for more growth across the state. Among them:

Honda announced plans to invest $85 million at its Lincoln plant in the first phase of a multi-faceted project to improve manufacturing flexibility, strengthen logistics efficiency for future models and prepare for future technologies.

Spain-based auto supplier Grupo Antolin announced plans to invest nearly $10.4 million to establish a manufacturing facility in Jefferson County that will employ 150 people by 2020.

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